LONDON -- Europe\'s central banks sold just 393 tonnes of gold against the full quota of 500 tonnes in the second year of an agreement that regulates bullion sales, precious metals consultancy GFMS Ltd said on Wednesday.
"This confounds market speculation during much of September that there had been a last minute rush to sell gold before the end of the second agreement year and that this was responsible for the period\'s price weakness," it said in a statement.
On Wednesday, spot gold fell nearly three percent to $559.40 an ounce, the lowest since June 15. Prices have fallen about 23 percent from its 26-year high of $730 in May.
Europe\'s Central Bank Gold Agreement (CBGA) was negotiated in 1999 to stabilise prices when gold was languishing below $300 because of the attraction of other investments.
The pact, agreed in 2004, raised the limit on gold sales by its 15 signatories over five years to 2,500 tonnes at a rate of 500 tonnes a year, from 2,000 in the previous 1999-2004 period. The second year of the current agreement ended on Sept. 26.
The banks sold the full quota of 2,000 tonnes during five years of the first agreement and 497.2 tonnes in the first year of the current pact.
"Looking ahead, GFMS also see little reason to alter their belief that sales under the remainder of the agreement are unlikely to reach quota either on an annual basis or for the full five-year agreement period," the statement said. "We are perhaps on the threshold of an era of more moderate net official sector selling."
According to a financial statement by the European Central Bank, Eurosystem members sold two tonnes of gold over the week ending Sept. 29, GFMS said.
"GFMS believe that the fact that CBGA signatories are not expected to fulfil their 2,500 (tonnes) sales limit over the duration of the second agreement, coupled with the very different market and price conditions likely to prevail in the next few years compared to those in 1999, probably indicates that a third CBGA is unlikely to materialise,"it said
http://www.gata.org/node/4435
Goldman, Deutsche Bank … that spells Gold Cartel. At least they are in there influencing the massive fund selling.
There are those who believe this is all about hedge funds blowing up, causing substantial liquidations. There is surely some truth in that, however, it is NOT causing gold and silver to dive bomb. It is The Gold Cartel.
The AM Fix was $578.50 … the PM Fix $573.60 … gold then collapsed to $558.90, AFTER the PM Fix, and physical market pricing for the day was concluded. We have seen this sort of attack by The Gold Cartel for many months. Hedge funds blowing up don’t dump their positions like that. If anything, they would be selling into the stronger Fix to get the BEST price. They wouldn’t wait for the market to go into free fall to dump. Just as important, they wouldn’t trade in the same pattern over and over again.
In addition, if there is such stress in the system, why is the US stock market going merrily on its way higher? Why aren’t the credit spreads showing any stress? Why isn’t the bond market rallying further? When there has been serious financial stress in the past, it shows somewhere in these key financial markets.
How coincidental that gold is bombed following Paulson’s closed door meeting with the leadership on Planet Wall Street!
How coincidental gold is bombed following the bombshell Foley and Woodward revelations which has the Bush Administration in all out panic!
How coincidental that Barrick Gold extended its bid for Nova Gold until October 14. The gold shares are falling apart as the share price of Nova G gradually moves towards Barrick’s bid of $14.50.... although, Nova G put in an impressive outside day key reversal to the upside, finishing UP 65 cents to $15.75. A case of the best laid plans gone awry? Let\\'s hope so.
All of the above is pertinent, but "the concrete evidence" is what nails it. That evidence was the announcement today that the ECB ONLY SOLD 2.3 tonnes of gold in the final week under the terms of the Washington Agreement for the calendar year Sep 26/05 thru Sep 26/06. This only brought the total up to 400 tonnes.
This is a big deal because numerous banks such as UBS and Barclays have reported HUGE central bank selling around the Fix for some time now. These banks all suggested it was massive selling of gold by the European banks to fill their quotas of that agreement. For many weeks now it was my contention the selling was more likely The Gold Cartel. This latest report reveals that GATA IS CORRECT. There is no other explanation for this enormous selling to knock gold down … ahead of the US elections. (More on this in gold goodies below).
The motive is the same as always. The ferociousness of the selling by the cabal is remarkable. As mentioned for months, Paulson doesn’t care how it looks, in his typical, arrogant Goldman Sachs style. He wants interest rates down and the stock market up for the elections.
http://www.lemetropolecafe.com
